Supreme Court Clarifies Dodd-Frank Whistleblower Provision

In a decision with substantial implications for Securities and Exchange Commission ("SEC" or "Commission") enforcement, on February 21, 2018, the U.S. Supreme Court unanimously narrowed the scope of anti-retaliation protections for whistleblowers under the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), holding in Digital Realty Trust, Inc. v. Somers that employees must report alleged violations of securities laws to the SEC to trigger anti-retaliation protections under the statute. Reversing a prior Ninth Circuit decision, the Supreme Court ruled that employees who report alleged violations only internally are not protected whistleblowers under Dodd-Frank but are protected only if they have reported to the SEC.